License Agreement
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THIS LICENSE AGREEMENT (the "Agreement") is made and entered into as of the
19th day of March 2002 by and between RTIN Holdings, Inc. (a Texas Corporation),
Safe Med Systems, Inc. (a Texas Corporation), and Safescript Pharmacies, Inc. (a
Texas Corporation) collectively referred to in this Agreement as "RTNH" or
"Licensor" and RxSystems, Inc. (a Nevada Corporation), on the other hand, which
is referred to in this Agreement as "RxSystems" or "Licensee".
RECITALS
WHEREAS, RTNH is the owner of a perpetual license to utilize certain
intellectual property, including the entire right, title, knowledge, and
interest in and to applications for United States Patent currently pending,
along with all rights to the Safescript Pharmacies, including the knowledge,
procedures and methods necessary to open and operate Safescript Pharmacies,
using the most advanced versions of RTNH's technology, all of which is referred
to in this Agreement as the "Applications"; and
WHEREAS, RxSystems desires to acquire a Perpetual License (the "License"),
as defined below, the exclusive right and license to the Applications and the
exclusive right and license to use, offer for sale and sell sub-licenses of,
products that are referred to in this Agreement as the "Licensed Products" based
on the methods and systems covered by the Applications, any continuation,
continuation-in-part or division of the Applications, and any patents that issue
on the Applications or any Continuation, continuation-in-part or division of the
Applications (the "Patents"); and
WHEREAS, RTNH is willing to grant the License on the terms, provisions, and
conditions hereinafter set forth;
AGREEMENTS
NOW, THEREFORE, for consideration Twenty Five Thousand dollars
($25,000) previously delivered on February 1st, 2002, Fourteen Thousand dollars
($14,000) previously delivered on February 28th, 2002 and the Eleven Thousand
dollars ($11,000) delivered March 4, 2002, and the delivery of a promissory note
in the amount of Four Hundred Fifty Thousand dollars ($450,000) executed
simultaneously herewith, and One Hundred Thousand (100,000) shares of Series A
Preferred stock convertible into Four Million Five Hundred Thousand ($4,500,000)
worth of RxSystems common stock, valued at the average closing price of the
common stock as quoted by the NASD OTC-BB or any comparable exchange for the 30
trading days beginning January 1, 2003 and ending of February 11, 2003, and in
consideration of the mutual covenants, terms, and conditions hereinafter
expressed, and other good and valuable consideration, the receipt, adequacy, and
sufficiency of which are acknowledged, the parties to this Agreement agree as
follows:
ARTICLE X.
XXXXX OF MASTER LICENSE
A. In consideration of the amounts paid by RxSystems as described above to
RTNH, RTNH hereby grants to RxSystems, within RxSystems' territory the
exclusive right and paid-up license to use and offer for sale, the
Applications and the Licensed Products based on the methods and systems
covered by the Applications, any continuation, continuation-in- part, or
division of the Applications, and any Patents that issue on the
Applications or any continuation, continuation-in-part, or division of the
Applications.
B. RTNH and RxSystems agree that the CMSA's identified via an asterisk on
Exhibit "A" hereto shall represent the territory granted to RxSystems
pursuant to this agreement.
ARTICLE II
FRANCHISE/LICENSE ROYALTIES
A. Licensee shall pay to Licensor Twenty Thousand dollars ($20,000) upon the
filing of each application for a license to operate a Safescript
Pharmacies, Inc. ("Safescript"). Licensee shall remit said fees within 15
days of the filing for any license. Additionally, Licensor shall be
entitled to a royalty of four percent (4%) of the gross revenue of each
store when received by Licensee, Licensee shall remit fees on the 15th day
of the next month after the month received.
ARTICLE III
DUTIES OF LICENSOR
A. Licensor shall train Licensee by opening the first four pharmacies to be
opened by the Licensee. Licensee will be responsible for all reasonable
expenses such as hotel and airfare. these will be reimbursed according to
the expense policies of RxSystems, but no later than thirty (30) days after
receipt by RXSystems of appropriate documentation of the expense.
B. Licensor agrees to use its best efforts to keep the system up, running and
connected to all pharmacies and the RxSystems designated users at all
times. Licensor will provide reasonable redundancy satisfactory to
RxSystems so that in the event of a system failure the pharmacies do not
lose operating function. Satisfactory redundancy within the meaning of this
paragraph means downtime no longer than that guaranteed by RTNH's vendors.
RTNH agrees to reduce this requirement if it is able to obtain shorter
downtime guarantees from its providers. If for any reason
the Licensor causes or allows the system to fail so that operating function
of a designated user is lost, then the Licensor shall be liable for
resulting damages, including, but not limited to, lost profits.
C. Licensor will make available to RxSystems the same knowledge, procedures,
methods, technology, software, systems and system applications, and
hardware that are available to and used by Safescript in the operation of a
pharmacy.
D. Licensor agrees to place in escrow a working copy of all software used by
Safe Med Systems, Inc. ("Safe Med Systems") and Safescript and to place in
escrow copies of all systems descriptions, patents, patent applications,
and hardware specifications for Safescript Pharmacies. If Licensor is in
material default under the terms of Article III (B) of this Agreement and
that default continues for longer than seventy two (72) hours, Licensee is
entitled to possession of all escrowed materials. If Licensor is in
material default under any other term of this Agreement for a period of
thirty (30) days, Licensee is entitled to possession of all escrowed
materials.
E. Licensor agrees to provide to RxSystems all updates to the software
systems, procedures, technology,, systems applications, and hardware
specifications as used by Safe Med Systems and Safescript.
F. Licensor grants RxSystems the right to utilization of any and all patent,
patent applications, and all patent information for the duration of this
Master Franchise and License Agreement; this right applies only to the
pharmaceutical business and industry.
G. All portal applications and banner ads will remain the property of
Licensor.
H. Licensor agrees, for the specified RxSystems territory as determined in
Article I.B of this Agreement, that RxSystems will be the sole and only
Master Licensee and agrees that Licensor will not grant any third party any
of the license rights granted RxSystems in this Agreement.
I. Licensor agrees that it will cooperate fully with the RxSystems in the
operation by RxSystems of the pharmacy locations, and Licensor agrees to
use its best efforts to enable RxSystems to operate the pharmacies. If any
operating problem is determined to be the fault of RxSystems, RxSystems
will bear the cost of correcting the problem.
J. Licensor agrees that it will provide any and all assistance required by
RxSystems in establishing a working business relationship with McKesson,
Inc. and/or Meridian Pharmaceuticals, Inc. with respect to the pharmacies,
and Licensor agrees to cooperate fully with RxSystems in establishing such
a relationship with McKesson and/or Meridian; Licensor will not be required
to provide any financial guarantees to any supplier of
RxSystems. RxSystems acknowledges that there is currently no agreement with
McKessor or Meridian and that the current negotiations between Licensor and
either McKesson or Meridian to be anything other than a be supplier have
not been finalized. In the event that Licensor is successful in negotiating
a relationship with McKesson and/or Meridian beyond that of a supplier then
Licensor shall use its best efforts to cause the same structure to be
offered to RxSystems.
K. Licensor agrees that RxSystems will be the owner of and entitled to retain
any and all rebates received from any supplier of inventory to the
RxSystems pharmacies.
L. Licensor agrees that it will make changes or modifications to the
applications and the licensed products as and when such changes or
modifications are required to operate the stores and requested by RxSystems
in order to operate the stores; no such request by RxSystems will be
unreasonably refused. Licensor will have a commercially reasonable time
period in which to make such change or modification. The provisions of this
paragraph L will not apply to stores located outside the United States. In
the event that Licensee has other modifications that it desires to have
made to the technology but which is not required to operate the stores then
such requests are to be submitted to Licensor and Licensor will provide
Licensee with a quote for the cost of the modification and Licensee shall
have the option to accept the quote and pay for the modification.
M. Any failure by Licensor to perform under the terms of this Agreement, which
failure is the direct result of an Act of God and/or are not the result of
any failure by Licensor, shall not constitute a material default under the
terms of this Agreement.
ARTICLE IV
DUTIES OF LICENSEE
A. Licensee shall receive, hold in confidence and take all reasonable efforts
to prevent disclosure of the Information and the Documents, except any
Information or Documents that are Non-Proprietary, as defined immediately
hereafter. For the purposes of this Agreement, "Non- Proprietary"
Information and Documents are those which:
(1) are, or shall have been in the possession of Licensee prior to the
disclosure or submission thereof by Licensor to Master Licensee, and
to Licensee.
(2) are, or through no fault of Licensee become published or otherwise
available to others or to the public under circumstances such that
others or the public may utilize the same without any direct or
indirect obligation to Licensor, or
(3) are, or at any time may be, acquired by Licensee from any third party
rightfully possessed of the same and having no direct or indirect
obligation to Licensor with respect to same.
B. Licensee shall cause all copies of the Licensed Product (as well as all
promotional material) to bear appropriate proprietary notices.
C. RxSystems agrees that it will maintain any and all knowledge, procedures,
methods, technology, patent information, software, systems and systems
applications as confidential proprietary information, and that it will not
divulge any such information to third parties without the prior consent of
Licensor.
D. Licensee agrees to operate the stores in accordance with the build out,
operations, and policy compliance standards of Safescript Pharmacies; any
objection by Licensee to any requirement of these standards will be
expressed in writing to Licensor, and, absent objection, Licensee will
comply with the standards. Policy compliance standards will be the same for
all stores, whether operated by Licensee or by Licensor. Objections will be
resolved by binding arbitration within seven (7) days; RTNH will appoint
one arbitrator, RxSystems will appoint one arbitrator, and these two
arbitrators will select a third. The arbitrators so selected shall
determine the rules under which arbitration proceedings will be conducted.
E. Licensee agrees that it will require physicians to lease from Safe Med
Systems the necessary equipment to purchase Licensed Products from the
Licensee and its sub-licensees. The terms of such leases shall be provided
by Safe Med Systems and shall be no less favorable to the physicians as any
lease of similar equipment by RTNH.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
A. Licensor hereby represents and warrants that it is the owner of the entire
right, title and interest in and to the perpetual license covering the
applications and has the sole right to grant licenses of the scope herein
granted, and (to the best of its knowledge) the manufacture, sale and use
of the Licensed Products by Licensee will not infringe the rights of any
other person.
B. Licensee hereby represents and warrants that it shall use its best
commercial efforts to market the Licensed Products and that their sale and
marketing shall be in conformance with all applicable laws and regulations,
including but not limited to all intellectual property laws. Licensee will
submit a store opening schedule no later than May 1, 2002.
ARTICLE VI.
INTELLECTUAL PROPERTY RIGHTS AND PROTECTION
A. Licensor may, but is not obligated to, continue to prosecute, in its own
name and at its own expense, the Applications in an effort to obtain
Improvement Patents. Licensor grants to Licensee the right, if Licensor
ever abandons the prosecution of the Applications in an effort to obtain
Improvement Patents, to apply for patents on the Licensed Products provided
that such patents shall be applied for in the name of Licensor and licensed
to Licensee during the License Period and according to the terms,
provisions and conditions of this Agreement. Licensee shall have the right
to deduct its reasonable our-of-pocket expenses for the preparation,
filing, and prosecution of any such patent application from future
royalties due to Licensor under this Agreement. Licensee shall obtain
Licensor's prior written consent before incurring expenses for any foreign
patent application.
B. If Licensor defaults, and such default is not cured within the applicable
time period, then any improvements in the licensed products made by
Licensee or any of its affiliates are the exclusive property of Licensee,
and all right, title, and interest in and to any such improvements and/or
derivative works shall remain with Licensee.
C. In the event that either party learns of imitations or infringements of the
Licensed Products, that party shall notify the other in writing of the
infringements or imitations. Licensor shall have the right to commence
lawsuits against third persons arising from infringement of Licensed
Products. In the event that Licensor does not commence a lawsuit against an
alleged infringer within 60 days of notification by Licensee, Licensee may
commence a lawsuit against the third party. Before filing suit, Licensee
shall obtain the written consent of Licensor to do so, and such consent
shall not be unreasonably withheld. Licensor shall cooperate fully and in
good faith with Licensee for the purpose of securing and preserving
Licensee's rights to the Applications and Patents. Any recovery (including,
but not limited to a judgment, settlement, or licensing agreement included
as resolution of an infringement dispute) shall be divided pro rata (based
on number of stores) between the parties after deduction and payment of
reasonable attorney's fees to the party bringing the lawsuit.
D. The parties acknowledge that Safe Med Systems is the sole owner of all
patient files relating to the services provided by Safe Med Systems.
RxSystems grants to RTNH a license in connection with such data owned by
RxSystems to provide additional therapeutic and analytical services to
physicians. The parties agree that they will not use patient files or data
to solicit patients or physicians.
ARTICLE VII.
MISCELLANEOUS
A. THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH AND
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS.
B. The parties consent to the exclusive jurisdiction and venue of the federal
and state courts located in Xxxxxxxx County, Texas, for any action arising
out of or relating to this Agreement. The parties waive any other venue to
which either party might be entitled by domicile or otherwise.
C. This Agreement represents the entire understanding between the parties, and
supersedes all other agreements, express or implied, between the parties
concerning the Applications and Patents. This Agreement or any provision of
this Agreement may be changed, modified, or altered only by a writing
signed by both parties.
D. The parties agree that if any part, term, or provision of this Agreement
shall be found to be illegal or to be in conflict with any valid
controlling law, the validity of the remaining provisions shall not be
affected thereby. If the legality of any provision of this Agreement is
brought into question because of a decision by a court of competent
jurisdiction of any country in which this Agreement applies, Licensor, by
written notice to Licensee, may revise the provision in question or may
delete it entirely so as to comply with the decision of said court.
E. The waiver of a breach hereunder may be effected only by a writing signed
by the waiving party and shall not constitute a waiver of any other breach.
F. Nothing contained in this Agreement shall be construed to place the parties
in the relationship of agent, employee, franchisee, officer, partners or
joint ventures. Neither party may create or assume any obligation on behalf
of the other.
G. Any notices, requests, demands, or other communications required or
permitted to be given under this Agreement must be in writing and may be
personally served, sent by United States mail, sent by an overnight courier
who keeps proper records regarding its deliveries. Notice shall be deemed
to have been given if personally served, when served, or if mailed, on the
third business day after deposit in the United States mail with postage
pre- paid by certified or registered mail and properly addressed, or if
sent by overnight courier as aforesaid with charges being billed to the
sender, when received by the party being notified. As used in this
Agreement, the term "business day" means days other than Saturdays,
Sundays, and holidays recognized by Federal banks. For purposes of this
Agreement, the physical addresses of the parties hereto shall be the
physical addresses, fax
numbers, and e-mail addresses as set forth on the signature pages of this
Agreement. Any party to be notified hereunder may change its physical
address by notifying each other party hereto in writing as to the new
physical address for sending notices.
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IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate on the
date set forth above.
LICENSOR
RTIN HOLDINGS, INC.
By /s/ Xxxxxx X. Xxxxxxx
_______________________________
Its President/CEO
____________________________________
0000 Xxxx Xxxx
Xxxxxxxx, Xxxxx 00000
Phone: 000.000.0000; Fax: 000.000.0000
LICENSEE
RXSYSTEMS, INC.
By /s/ Xxxxx X. Xxxxxx
_____________________________________
Its President/CEO
____________________________________
000 Xxxxxxxxxxxx Xx.
Xxxxx 0000
Xx. Xxxxx, Xxxxx 00000
Phone: 000-000-0000; Fax: 000-000-0000
